India Sugars & Refineries Ltd. कंपली की लेखा नीति

Sep 30, 2013

1 Company Overview

THE INDIA SUGARS & REFINERIES LIMITED (the "Company") is engaged in Manufacture of Sugar at its factory located at Chitwadgi, Hospet in the State of Karnataka. It deals with Sugar and attendant byproducts like Molasses and Bagasse.

2 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention except for land, Building and Plant and Machinery as at April 1,1990, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year .All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non current classification of assets and liabilities.

3 Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and revenue and expenses during the periods reported. Estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Due to inherent uncertanity involved in making estimates, actual results may differ from those estimates under different assumptions or conditions. Any revision to accounting estimate is recognised prospectively in the current and future periods.

4 Fixed assets and depreciation/amortisation

(i) Fixed assets, except for Land.Building and Plant and Machinery revalued as at April 1,1990 are carried at cost less accumulated depreciation and impairment losses, if any.ln the case of such revalued assets, they are stated at values comprising cost and amount added on revaluation less depreciation. The cost of fixed assets includes interest on borrowings, if material, attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Cost of fixed assets is net of credit under any scheme of the government and is inclusive of borrowing costs, if material, and other directly attributable cost of bringing the asset to its working condition for its intended use. (ii) Depreciation for the year (net after transfer from revaluation reserve) on fixed assets reflects provisioning at the rates and in the manner specified in Schedule XIV to the Act on the acquisitions made before October 1,1986 as per the Written Down Value method and on the acquisitions made on or after the said date, as per the Straight Line method.

5 Investments

Long term ''Investments are carried at cost with provision made for diminution, other than temporary, in its value.

6 Inventories

Inventories are valued at the lower of cost and net realisable value except for Molasses (a by-product) which is valued at estimated net realisable value. Cost includes duties and taxes and is net of credit under any scheme of the government and is ascertained (i) on moving weighted average method with respect to stores and spares and (ii) on absorption costing method with respect to materials in process (sugar) and finished goods (sugar). Under the absorption costing method, apart from direct cost and variable overheads, fixed production overheads including expenses of factory management and administration and estimated inventory holding costs pertaining to bringing the finished product to its present location and condition, are also included. The allocation of fixed production overheads for the purpose of their inclusion in the cost of conversion is based on the normal capacity (based on period of the season and volume of sugarcane crushed) of the production facilities. In circumstances where there is no data to determine the normal capacity in the above stated manner, the said allocation will be based on actual capacity utilisation.

7 Revenue/Expenditure recognition

(i)Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax. (ii) Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.(iii) The expenses on retaining labour work force relating to crushing season of the next year has been treated as Prepaid expenditure and carried over to next year on the concept of matching costs with revenue.

8 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity and compensated absences.

Defined contribution plans

The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity and compensated absences, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.

Short-term employee benefits

Short tern employee benefit such as wages, salaries, bonus and non monetary benefits such as medical care, housing, subsidised canteen facilities are estimated and provided for.The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders therelated service. The cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

9 Taxes on income

Current tax is determined and provided for as the amount of tax payable in respect of taxable income for the period upto to the end of the accounting year. Deferred tax is recognised and accounted on timing differences between taxable income and the accounting income subject to consideration of prudence. Deferred tax asset will be recognised on unabsorbed depreciation, carry forward of losses and on other items of timing differences only to the extent there is a virtual certainty that there will be sufficient future taxable income available to realise such assets.

10 Government grant

Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants / subsidy will be received. Grants in the form of capital / investment subsidy are treated as capital reserve. Incentives in the nature of subsidies given by the government are reckoned in revenue in the year of eligibility and disclosed as a deduction from the related expense.

11 Claims,Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Claims against the company but not acknowledged as debt are disclosed in financial statement after careful evaluation of the facts and legal aspects of the matter involved. Claims by the company are recognised as and when the same are made and are accounted at the estimated realisable amount.

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Sep 30, 2012

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention except for land, Building and Plant and Machinery as at April 1,1990, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for change in the treatment of the expenditure on planned replacement of parts of machinery more fully described in Note 25.5.AII assets and liabilities have been classified as current or non- . current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non current classification of assets and liabilities.

1.2 Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and revenue and expenses during the periods reported. Estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Due to inherent uncertanity involved in making estimates, actual results may differ from those estimates under different assumptions or conditions. Any revision to accounting estimate is recognised prospectively in the current and future periods.

1.3 Fixed assets and depreciation/amortisation

(i) Fixed assets, except for Land,Building and Plant and Machinery revalued as at April 1,1990 are carried at cost less accumulated depreciation and impairment losses, if any. In the case of such revalued assets, they are stated at values comprising costand amount added on revaluation less depreciation. The cost of fixed assets includes interest on borrowings, if material, attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Cost of fixed assets is net of credit under any scheme of the government and is inclusive of borrowing costs, if material, and other directly attributable cost of bringing the asset to its working condition for its intended use. (ii) Depreciation for the year (net after transfer from revaluation reserve) on fixed assets reflects provisioning at the rates and in the manner specified in Schedule XIV to the Act on the acquisitions made before October 1, 1986 as per the Written Down Value method and on the acquisitions made on or after the said date, as per the Straight Line method.

1.4 Investments

Long term ''Investments are carried at cost with provision made for diminution, other than temporary, in its value.

1.5 Inventories

Inventories are valued at the lower of cost and net realisable value except for Molasses (a by-product) which is valued at estimated net realisable value. Cost includes duties and taxes and is net of credit under any scheme of the government and is ascertained (i) on moving weighted average method with respect to stores and spares and (ii) on absorption costing method with respect to materials in process (sugar) and finished goods (sugar). Under the absorption costing method, apart from direct cost and variable overheads, fixed production overheads including expenses of factory management and administration and estimated inventory holding costs pertaining to bringing the finished product to its present location and condition, are also included. The allocation of fixed production overheads for the purpose of their inclusion in the cost of conversion is based on the normal capacity (based on period of the season and volume of sugarcane crushed) of the production facilities. In circumstances where there is no data to determine the normal capacity in the above stated manner, the said allocation will be based on actual capacity utilisation.

1.6 Revenue/Expenditure recognition

(i)Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax. (ii) Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.(iii) The expenses on retaining labour work force relating to crushing season of the next year has been treated as Prepaid expenditure and carried over to next year on the concept of matching costs with revenue.

1.7 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity and compensated absences.

Defined contribution plans

The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fell due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity and compensated absences, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.

Short-term employee benefits

Short tern employee benefit such as wages, salaries, bonus and non monetory benefits such as medical care, housing, subsidised canteen facilities are estimated and provided for.The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Lono-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.8 Taxes on income

Current tax is determined and provided for as the amount of tax payable in respect of taxable income for the period upto to the end of the accounting year. Deferred tax is recognised and accounted on timing differences between taxable income and the accounting income subject to consideration of prudence. Deferred tax asset will be recognised on unabsorbed depreciation, carry forward of losses and on other items of timing differences only to the extent there is a virtual certainty that there will be sufficient future taxable income available to realise such assets.

1.9 Government grant

Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the condtions attached to them and the grants / subsidy will be received. Grants in the form of capital / investment subsidy are treated as capital reserve. Incentives in the nature of subsidies given by the government are reckoned in revenue in the year of eligibility and disclosed as a deduction from the related expense.

1.10 Claims,Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and .it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Claims against the company but not acknowledged as debt are disclosed in financial statement after careful evaluation of the facts and legal aspects of the matter involved. Claims by the company are recognised as and when the same are made and are accounted at the estimated realisable amount.

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Sep 30, 2011

The Financial statements are prepared In accordance with the presentational requirements of the Companies Act, 1956 (the Act) and the generally accepted accounting principles in India and under historical cost convention, except so far as they relate to revaluation of certain lands, buildings and plant and machinery. The significant accounting policies adopted by the Company are as under:

Use of estimates - The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and revenue and expenses during the periods reported. Estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Due to inherent uncertainty involved in making estimates, actual results may differ from those estimates under different assumptions or conditions. Any revision to accounting estimate is recognised prospectively in the current and future periods.

Revenue recognition –(i) Sales are recognised when goods are supplied and are recorded inclusive of excise duty but net of sales tax. (ii) The expenses relating to crushing season of the next year has been carried over to next year and has been disclosed under "Deferred revenue expenditure*' in the assets side of the Balance Sheet on the concept of matching costs with revenue.

Fixed assets and depreciation/amortisation –

(i) Fixed assets are stated at cost iess depreciation except in the case of certain lands, buildings and plant and machinery which were revalued as on April 1, 1990; in the case of such revalued assets, they are stated at values comprising cost and amount added on revaluation less depreciation. Cost of fixed assets is net of credit under any scheme of the government and is inclusive of borrowing costs, if material, and other directly attributable cost of bringing the asset to its working condition for its intended use.

(ii) Depreciation for the year (net after transfer from revaluation reserve) on fixed assets reflects provisioning at the rates and in the manner specified in Schedule XIV to the Act on the acquisitions made before October 1, 1986 as per the Written Down Value method and on the acquisitions made on or after the said date, as per the Straight Line method.

Investments - These are carried at cost and disclosing separately the provision for diminution, other than temporary, in the value of investment.

Inventories - Inventories are valued at the lower of cost and net realisable value except for Molasses (a by-product) which Is valued at estimated net realisable value. Cost includes duties and taxes and is net of credit under any scheme of the government and is ascertained (I) on monthly moving weighted average method with respect to stores and spares and (ii) on absorption costing method with respect to materials in process (sugar) and finished goods (sugar), Under the absorption costing method, apart from direct cost and variable overheads, fixed production overheads including expenses of factory management and administration and estimated interest charges pertaining to bringing the finished product to its present location and condition, are also included. The allocation of fixed production overheads for the purpose of their inclusion in the cost of conversion is based on the normal capacity {based on period of the season and volume of sugarcane crushed) of the production facilities, in circumstances where there is no data to determine the normal capacity in the above stated manner, the said allocation will be based on actual capacity utilisation.

Employee© benefits - Short tern employee benefit such as wages, salaries, bonus and non monetary benefits such as medical care, housing, subsidized canteen facilities estimated and provided for. Post employment benefits and other long term benefits: Company's contribution benefits to employees provident fund administered by the Central Government are determined on a monthly basis and charged to revenue; Liability for Employees Gratuity, other retirement benefits and compensated absences are actuarially determined at each balance sheet date using the projected unit credit method and provided for. Actuarial gains and losses are recognised in revenue.

Taxes on income - Current tax is determined and provided for as the amount of tax payable in respect of taxable income for the period upto to the end of the accounting year. Deferred tax is recognised and accounted on timing differences between taxable income and the accounting income subject to consideration of prudence. Deferred tax asset will be recognised on unabsorbed depreciation, carry forward of losses and on other items of timing differences only to the extent there is a virtual certainty that there will be sufficient future taxable income available to realise such assets.

Government grant - Grants in the form of capital I investment subsidy are treated as capital reserve. Incentives In the nature of subsidies given by the government are reckoned in revenue in the year of eligibility and disclosed as a deduction from the related expense.

Claims - (i) Claims against the company but not acknowledged as debt are disclosed in financial statement after careful evaluation of the facts and legal aspects of the matter involved and (ii) Claims by the company are recognised as and when the same are made and are accounted at the estimated realisable amount

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Sep 30, 2010

The Financial statements are prepared in accordance with the presentational requirements of the Companies Act, 1956 (the Act) and the generally accepted accounting principles in India and under historical cost convention, except so far as they relate to revaluation of certain lands, buildings and plant and machinery. The significant accounting policies adopted by the Company are as under:

Use of estimates - The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and revenue and expenses during the periods reported. Estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Due to inherent uncertanity involved in making estimates, actual results may differ from those estimates under different assumptions or conditions. Any revision to accounting estimate is recognised prospectively in the current and future periods.

Revenue recognition -() Sales are recognised when goods are supplied and are recorded inclusive of excise duty but net of sales tax. (ii) The expenses relating to crushing season of the next year has been carried over to next year and has been disclosed under"Prepaid expenses/ Deferred revenue expenditure" in the assets side of the Balance Sheet on the concept of matching costs with revenue.

Fixed assets and depreciation/amortisation - (i) Fixed assets are stated at cost less depreciation except in the case of certain lands, buildings and plant and machinery which were revalued as on April 1, 1990; in the case of such revalued assets, they are stated at values comprising cost and amount added on revaluation less depreciation. Cost of fixed assets is net of credit under any scheme of the government and is inclusive of borrowing costs, if material, and other directly attributable cost of bringing the asset to its working condition for its intended use. (ii) Depreciation for the year (net after transfer from revaluation reserve) on fixed assets reflects provisioning at the rates and in the manner specified in Schedule XIV to the Act on the acquisitions made before October 1, 1986 as per the Written Down Value method and on the acquisitions made on or after the said date, as per the Straight Line method.

Investments - These are carried at cost and disclosing separately the provision for diminution, other than temporary, in the value of investment.

Inventories - Inventories are valued at the lower of cost and net realisable value except for Molasses (a by-product) which is valued at estimated net realisable value. Cost includes duties and taxes and is net of credit under any scheme of the government and is ascertained (i) on monthly moving weighted average method with respect to stores and spares and (ii) on absorption costing method with respect to materials in process (sugar) and finished goods (sugar). Under the absorption costing method, apart from direct cost and variable overheads, fixed production overheads including expenses of factory management and administration and estimated interest charges pertaining to bringing the finished product to its present location and condition, are also included. The allocation of fixed production overheads for the purpose of their inclusion in the cost of conversion is based on the normal capacity (based on period of the season and volume of sugarcane crushed) of the production facilities. In circumstances where there is no data to determine the normal capacity in the above stated manner, the said allocation will be based on actual capacity utilisation.

Employee benefits - Short tern employee benefit such as wages, salaries, bonus and non monetory benefits such as medical care, housing, subsidised canteen facilities estimated and provided for. Post employement benefits and other long term benefits, Companys contribution benefits to employees provident fund administered by the Central Government are determined on a monthly basis and charged to revenue. Liability for Employees Gratuity, other retirement benefits and compensated absences are actuarially determined at each balance sheet date using the projected unit method and provided for. Actuarial gains and losses are recognised in revenue.

Taxes on income - Current tax is determined and provided for as the amount of tax payable in respect of taxable income for the period upto to the end of the accounting year. Deferred tax is recognised and accounted on timing differences between taxable income and the accounting income subject to consideration of prudence. Deferred tax asset will be recognised on unabsorbed depreciation, carry forward of losses and on other items of timing differences only to the extent there is a virtual certainty that there will be sufficient future taxable income available to realise such assets.

Government grant - Gfants in the form of capital / investment subsidy are treated as capital reserve. Incentives in the nature of subsidies given by the government are reckoned in revenue in the year of eligibility and disclosed as a deduction from the related expense.

Claims - (i) Claims against the company but not acknowledged as debt are disclosed in financial statement after careful evaluation of the facts and legal aspects of the matter involved and (ii) Claims by the company are recognised as and when the same are made and are accounted at the estimated realisable amount.

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Sep 30, 2009

Not Available